The Federal Trade Commission called social media a “gold mine” for scammers in its 2021 Consumer Protection Data Spotlight. With 82 percent of the U.S. population having at least one social networking profile, cybercriminals have found new ways to steal.
According to the FTC, more than one in four people who reported losing money to fraud in 2021 traced it back to social media — an ad, a post or a message. That same year, more than 95,000 people reported nearly $770 million in losses to fraud from social media platforms. Those losses account for about 25% of all reported losses to fraud that year.
When it comes to online scams, it’s a question of when you will be targeted, not if. Here are six common online scams and how to spot them.
1. Donation scams
Americans contributed more than $484.5 billion to charity in 2021, according to the Giving USA Foundation. While this generosity is heartwarming, it opens a door for scammers who prey on people’s kindness.
Donation scams include crowdfunding campaigns that don’t go to the stated recipient(s) and phone calls claiming to be from a legitimate charity. Be on the lookout for warning signs, such as pressure to give, a thank you for a donation you don’t recall making or a request for immediate payment by cash or wire transfer. Watchdog organizations like the Better Business Bureau’s Wise Giving Alliance rate organizations and are helpful for verifying an organization’s legitimacy.
2. Tech support scams
Tech support scams became widespread during the pandemic when many people were homebound. Someone posing as a representative from a legitimate company reaches out, convincing the victim something terrible will happen to their device if they don’t give the scammer immediate access to their computer.
For people over the age of 60, the tech support scam was the most reported type of online fraud in 2021, increasing by 51% since 2019. One FTC analysis found that adults over 60 are six times more likely than younger people to lose money to a tech support scam.
3. Cryptocurrency scams
The combination of cryptocurrency dominating the news, the fact that few people understand it, and that crypto is designed to be untraceable equals prime scamming opportunity.
Never take any advice from anyone you only know online about cryptocurrency. While there are legitimate coaches out there, unfortunately there are just as many scammers. Don’t let anyone else manage your wallet; don’t invest in sites that anyone sends you; and stick to the legitimate trading markets.
4. Romance scams
Romance scams target people who are looking for love online. The scammer reaches out to the victim — through online dating sites, social media, even text messages — and establishes a relationship with them. Then, once the victim thinks that they’re in love, the scammer creates a situation that requires the victim to send money or goods. Romance and dating scams resulted in losses totaling $547 million in 2021, up from 890% in 2020, according to MSNBC.
The FTC shares how to spot a romance scam:
- Never send money to someone you haven’t met in person, and don’t act on their investment advice.
- Talk to friends or family about your new love interest and pay attention if they’re concerned. They will likely see red flags before you do.
- Try a reverse-image search of profile pictures. If the details don’t match up, it’s a scam.
5. Rental scams
In 2021, 11,578 people reported losing $350,328,166 due to these types of scams, a 64% increase from the previous year. Real estate scammers often use websites like Craigslist to post fake rental properties, using stolen photos and information from legitimate listings for fake ads.
Rental scams take advantage of people needing an affordable place to live by offering fake apartments for way under market price. They insist that the victim send over a deposit without ever seeing the apartment. The victim, not wanting to miss out on the deal, sends money — and the scammer disappears.
Proceed with caution. Never wire money to people you do not know. Do not put money towards a house or property you have not seen. And do your research – look for online reviews, references, and testimonials for past inhabitants.
6. Sextortion scams
Sextortion emails threaten to release compromising intimate photos of the potential victim unless they pay a requested ransom. The Netflix documentary, The Most Hated Man On The Internet, is an example. Hunter Moore not only solicited intimate images from vengeful exes, but he hacked into victims’ devices, stole their photos, posted them online, and then demanded a ransom to take them down.
How do you avoid falling pretty to an online scam? Stay aware and remember: if it sounds too good to be true, it probably is.